Wednesday, May 30, 2012

Static Caravan Tax - how it wasn't thought through

I've noted the anomaly that was our MP stating that he was opposed to the imposition of VAT on static caravans while not voting for the prevention of it in the House; I might also point out the passing of a petition by said MP but not signing the EDM regarding it.

Of course it's all moot now given the U-turn.

Except it's not a U-turn VAT is still looking to be imposed on static caravans at the reduced rate of 5%, but this is still wrong in my opinion. The way I see it it's quite simple and falls to definitions.

A caravan currently attracts full VAT as does a car and a trailer, but a static caravan isn't any of those despite the name. It can't be hooked up to a car and it's not movable in its own right. Sure it can be picked up and moved, but in theory so can pretty much anything given time and effort. Essentially a static caravan is something designed to be lived in that's fixed to one spot, we normally call these things 'property'.

Static caravans aren't caravans they're property and would you look at that property has its own tax - it's called Stamp Duty Land Tax. So why didn't the government just declare static caravans as being property and thus subject to SDLT rather than VAT?

Simple really SDLT kicks in at £125k; with the price of static caravans being less than that they'd be zero duty and the government wouldn't get any money. VAT on the other hand starts instantly and means more wonga into their coffers.

This isn't about simplifying the tax laws. It's about a new source of revenue.

Worse yet as  static caravans are about a tenth or more the cost of 'normal' residential property they're likely to be bought by those who can't afford such. So once again the Conservative government seeks to take yet more money from those who have the least while allowing those who have the most to retain more.


Don B said...

In my area we have at least 3 caravan parks. The district council impose a residence restriction that residents can only stay in them for 11 months in the year. Fine - except that many of the residents live there permanently but go off on holiday for the 11th month. The are supposed to have a main home elsewhere but nobody checks. The result is that they pay no council tax.

FlipC said...

If that's a problem it's an easily solvable one - ditch the time restriction (because dear gods that is the stupidest way to try and determine this) and instead ask long-term caravan owners to provide a receipt from their main residence's local council of tax paid.

Failure to do so will mean their caravan is treated as their main residence and they'll be charged council tax as appropriate.

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